COVID-19 Devastating South Korean stock and bond markets – BusinessKorea

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COVID-19 Devastating South Korean stock and bond markets – BusinessKorea


The South Korean stock market is facing a shock amid the spread of COVID-19.

The South Korean stock market is facing a shock comparable to that which it experienced during the 2008 global financial crisis.

The Korea Composite Stock Price Index (KOSPI) fell from 2,242.17 points on February 17 to 1,987.1 points on February 28, dropping below 2,000 points in about six months. The KOSPI 200 volatility index reached 33.11 on February 28, reaching a peak of 99 months. In 2008, the index lost no less than 20.49% from October 20 to October 24. Although the latest decline is still not comparable to this dip, the index should continue to decline for some time.

Under these conditions, more and more investors are flocking to the bond market. The three-year Treasury rate fell from 1.51 basis points to 1.136 basis points from February 20 to February 28, which means that the price of the bond jumped by about 40%.

However, investor confidence in the bond market is disappearing as infection at the community level continues to spread. According to the Financial Supervisory Service, foreign investors, who raised their bonds in the South Korean market from 125.01 billion won to 129.79 billion won from January 20 to February 21, reduced the volume to 129.2 trillion won in the last week of last month. .

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